Frugal Is Rich

If you were watching the news on Saturday (2/19), the Ukraine Russia conflict did get heated up. There was an increase in fire exchange between Ukraine and Russian-backed separatists. I believe the market will show a negative impact due to the growing tensions as has been seen historically when war news usually breaks out. Markets never like uncertainty and tensions and hence it reacts in a negative manner. The futures are significantly down and similarly the major cryptocurrencies on 2/21/2022.   Here is a view of the S&P500 futures as I am writing this article - Source: finviz.com Bitcoin has similarly taken a constant dive since the last week with some resistance but trending downwards overall. Source: Finance.google.com The increased chances of the US, UK and other EU nations imposing sanctions could further create more turbulence in the markets. I am following the situation very closely and if Russia takes over parts of Ukraine then things are going to go sideways for...

I have been keeping a close eye on the market movements and particularly two themes have still maintained uncertainty in the last two months. Firstly, the timeline around when does the Fed hike interest rates and secondly the Russia-Ukraine situation.  Multiple banks and Fed Presidents have chimed in with various different strategies, the common theme being a consecutive rise in interest rates to fight inflation. I believe the Fed will take a cautious approach with series of 25 basis points (bps) increase over the next few months to spread the negative impact rather than straight off go to a 100 basis points increase. This will be inline with the Bank of England approach to fighting inflation as well which raised 25 bps in February 2022. Please see below the strategy of gradual uptrend in the interest rates by the Bank of England between Nov 2021 and 2022. Source: Tradingeconomics.com (UK Interest Rates)  At the same time, the US has held steady but I believe the trend to rais...

People love their money and any chance of getting higher returns gets them all excited. So does more money mean more happiness? Well, that's an intense topic but my "personal" beliefs are that if you have the money, then you have the ability to pretty much buy anything. To dive into the reality, things that you bought lets say 10 or 20 years ago wouldn't really cost you the same any more. The box of chocolates that you bought 10 years back for $10 would now cost you may be $15 in the current market. So the moral of the story is you need more dollars with time because the purchasing power of the dollar decreases as the prices increase. This wonderful phenomenon is called Inflation. In real life, you see inflation in effect with higher rents, increasing food precises and travel costs.  To see this in effect, see the buying power of $100 back in January, 2000 now equals out to $165.17 in December, 2021. Hence you would need 65 more dollars to buy the same thing which you...

It's been a rough start for 2022 when you compare the markets and how they have performed the month of January 2022. If you carefully look at the last 6 months in this picture below, we are pretty much back at where we were at July 30, 2021 (with the S&P 500 at 4395.26). Amazing how fast things can change, basically pushing you back to 6 months in time. S&P500 in last 6 Months (Source: Google Finance) In the past month itself, (as of Jan 23, 2022) it seems like the S&P 500 is down roughly 8.21% , Nasdaq which further got a heavier blow is down 13.25% and Dow is roughly 5.61% down. Similarly in Crypto land (cryptocurrencies), Bitcoin is down 28.89% while Ethereum is at 34.52% downwards. So scary moments?  Bitcoin to USD in last 1 Month (Source: Google Finance) I disagree to call this a scary moment as Warren Buffet has rightly said "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful" . I am getting greedy at the moment, and buying as much as I...

The year 2021 is a wrap and so are the market numbers which again have been impressive. Based on the S&P Global Website, the numbers are looking great this year as well.  S&P500 is up 26.89%, Dow Jones 18.73% while the Nasdaq Composite was up by 21.4%.  As spectacular it could be making me realize do I really need to work that hard with my portfolio as beating the indexes have been extremely difficult. This year my plan is to keep focusing more and more on passive investing in these 3 indexes. Given the state of inflation, I need to make my money work harder for me given the Consumer Price Index (CPI) topped 7% in December. People whose wages have increased this year to match inflation are definitely fortunate but for those for whom things have not changed require new avenues to ensure they don't get into negative return zones keeping their money stagnant. Given the state of inflation, I am looking for other deals to not have my money sitting there in the bank. Last ye...